Updates to the Fringe Benefits Rules
Earlier this month, changes were made to Subsidiary Legislation 123.55 – Fringe Benefits Rules (“the Rules”). The main amendments are the following:
- Benefits arising due to an employment or office – these benefits are deemed to arise in the country in which the services in terms of the employment contract are wholly or principally performed and in the case of a directorship, in the country in which the company is managed.
- Private use of vehicles – in the case of vehicles wholly or mainly used for point-to-point services by a salesman or support person, no value will be attributed to the private use of the vehicle if the vehicle value does not exceed €16,310. This would need to be approved by the Commissioner for Revenue.
- Private use of property – in the case of immovable property owned by the provider of the benefit or a related party provided to an employee for use and enjoyment other than solely as a place for the performance of his duties as an employee or an officer, the annual private use of the immovable property shall be deemed to be 5% of the higher of the market value and the cost of the property. In the case of movable property, the relevant percentage would be 12%.
- Free or discounted transfer of property and provision of services – the value of the benefit will be the excess, if any, of the value of the property or service over the consideration paid by the beneficiary. Special rules apply to “in-house property” and “in-house services”, as defined in the Rules.
- Share option schemes – the value of the benefit provided by an employer who grants shares in a company to an employee of that company or an associated company will be the excess, if any, of the price which the shares in question would amount to if sold in the open market on the date when the benefit is provided over the price paid or payable by the beneficiary for those shares.
- Relocation costs – a definition of relocation costs has been included in the Rules. Costs included within this definition would not be deemed to constitute a fringe benefit.
For more information, please contact Nicky Gouder or Luana Scicluna.